Start at the bottom and work up

While on the transparent layer go find a sky you like. Use the place tool and now you have a dramatic sky for your picture.

Delete sky. Feather set to zero under refine edge.
After you hit delete you see the transparent background layer.

Use magic wand tool. Set tolerance to 50 in this case then pick the sky area.

Copy base lock layer. Erase lock original layer. Move transparent layer below.
Add new transparent layer

Original Sky
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